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Risk Course_Slides_Nov 2016 v2

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Risk Course_Slides_Nov 2016 v2

  1. 1. Copyright © 2016 R&O ANALYTICS Pty Ltd. All rights reserved By Dr. Luis Martinez Tipe Uncertainty = Risk + Opportunity in Mine Planning
  2. 2. Copyright © 2016 R&O ANALYTICS Pty Ltd. All rights reserved What is the effect of the ‘What if..?’ uncertainties on project economics/What are the best strategies to follow 2
  3. 3. Copyright © 2016 R&O ANALYTICS Pty Ltd. All rights reserved Despite uncertainty being all about us, uncertainty is often denied....why? 3 One reason for suppression is clear: People do not like to be unsure and instead prefer to have everything sharply defined
  4. 4. Copyright © 2016 R&O ANALYTICS Pty Ltd. All rights reserved There is still some reliance from decision makers in working with a given expected mine value number ..Why? 4
  5. 5. Copyright © 2016 R&O ANALYTICS Pty Ltd. All rights reserved “the flaw of averages in mine project evaluation” 5
  6. 6. Copyright © 2016 R&O ANALYTICS Pty Ltd. All rights reserved Mining imperative calls for new alternatives and tools to analyse and evaluate a mine operation in the face of uncertainty 6 Mining companies can’t just dabble at the edges by keep using traditional processes and techniques which do not consider uncertainty. Time
  7. 7. Copyright © 2016 R&O ANALYTICS Pty Ltd. All rights reserved General mine project simulation-optimisation framework 7 Mine Planning is a Non- Linear process
  8. 8. Copyright © 2016 R&O ANALYTICS Pty Ltd. All rights reserved Quantifying the effect of the uncertainty in orebody modelling 8
  9. 9. Copyright © 2016 R&O ANALYTICS Pty Ltd. All rights reserved Quantifying the effect of the uncertainty in metal prices 9
  10. 10. Copyright © 2016 R&O ANALYTICS Pty Ltd. All rights reserved Uncertainty and risk in open pit mine planning and design (ultimate pit and production scheduling final limits) 10
  11. 11. Copyright © 2016 R&O ANALYTICS Pty Ltd. All rights reserved Going beyond risk analysis Sunday, 30 October 2016 So, What can we do to protect from uncertainty? How can we minimise risk and maximise opportunities…
  12. 12. Copyright © 2016 R&O ANALYTICS Pty Ltd. All rights reserved Real options as tool to manage uncertainty in decision making 12
  13. 13. Copyright © 2016 R&O ANALYTICS Pty Ltd. All rights reserved Silver project valuation – using DCF 13
  14. 14. Copyright © 2016 R&O ANALYTICS Pty Ltd. All rights reserved Dynamic discounted cash flow and ENPV = NPV + ValOption 14 ValOption = $9.68 - $8.49 = $1.19
  15. 15. Copyright © 2016 R&O ANALYTICS Pty Ltd. All rights reserved Silver project - real options analysis 15
  16. 16. Copyright © 2016 R&O ANALYTICS Pty Ltd. All rights reserved Add value by identifying optimal strategies over time in the face of uncertainty 16 Shift of paradigm from numbers to distribution of probabilities

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